Between strong deployments from Tier 1 and Tier 2
service providers in North America and healthier trends among enterprise
customers than seen by chip companies like Xilinx (XLNX) and Intel (INTC), Ciena (CIEN)
had a great fiscal second quarter. Better yet, between a strong
competitive position at 800G, ongoing growth in segments like submarine
deployments, and opportunities to gain share in Europe, I don’t believe
Ciena has exhausted its growth potential.
I’ve been
generally bullish on Ciena for a while now, and there are at least some
metrics by which the shares are still undervalued. I like to buy stocks
like Ciena when they slip below my long-term DCF-based fair value (which
is now near $40), and Ciena has been volatile enough that I don’t think
it’s entirely unreasonable to think there will be more “buy on a
pullback” opportunities. Still, management is executing well on its
opportunities, leading to share gains and improving margins.
Read more here:
Ciena Doing Great In North America; Europe Remains An Opportunity
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